Financial Literacy in This Country? Don’t Act on a Hot Tip!

When Bangladesh Prime Minister Sheikh Hasina recently unveiled the National Financial Literacy Programme for investors—the first of its kind in the country—she pledged the government’s support in developing a modern stock market and also made a plea for greater financial education.

Hasina called on citizens to take responsibility for their investments and cautioned against making financial decisions based on whispered rumors, speculation and hot tips. This is basic advice in developed markets. But every nation has its financial literacy focus, and for Bangladesh it is getting ordinary people to invest more and to question their investments more closely.

Many investors don’t how to read and interpret financial statements and other information provided by companies they invest in, the Prime Minister noted. “Sometimes they make investments based on rumors and assumptions, and by doing that they stand a chance of losing their money,” she said. “Then they blame the government for their losses.”

For starters, she advises individuals make sure they’re investing in companies that earn profits. Anything else is pure speculation.

Hasina reiterated her mission to eradicate poverty in Bangladesh and stressed economic development—and wise personal investment decisions—as a key. The nation’s new financial literacy program will help individuals understand their level of financial need and the role money can and should play in their lives. It emphasizes how to responsibly save and invest, and evaluate risk.

At the company level, the Bangladesh government has been stimulating infrastructure investment as a means to make its companies more profitable and generate more jobs. At the individual level, it wants to foster greater financial discipline in investments and personal spending. Hasina sees the development of a modern stock market as working towards both ends.

She has enjoyed some success. The country is enjoying a higher degree of financial stability and increasingly attracting foreign investment. Says Hasina: “Bangladesh is now the most attractive destination of investment compared to other countries in South Asia.”

Posted in International, Policy & Government on January, 2017